U.S. expects immediate action from China on trade commitments

[webfact]

U.S. expects immediate action from China on trade commitments

By Jeff Mason and David Lawder

 

U.S. President Donald Trump and Chinese President Xi Jinping attend a working dinner after the G20 leaders summit in Buenos Aires, Argentina December 1, 2018. REUTERS/Kevin Lamarque

 

WASHINGTON (Reuters) - The United States expects China to take immediate action to cut tariffs on U.S. car imports and end intellectual property theft and forced technology transfers as the two countries move toward a broader trade deal, a White House official said on Monday.

 

President Donald Trump and Chinese President Xi Jinping on Saturday agreed to a ceasefire in a trade war that has seen the flow of hundreds of billions of dollars worth of goods between the world's two largest economies disrupted by tariffs.

 

The two leaders agreed to hold off on imposing more tariffs for 90 days starting Dec. 1 while they negotiate a deal to end the dispute following months of escalating tensions.

 

Global markets rose on Monday to their highest levels in about three weeks on the news. On Wall Street, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all gained more than 1 percent.

 

U.S. soybean futures rose to their highest level since at least August, part of a broader commodities rally.

 

China offered more than $1.2 trillion in additional commitments on trade at the dinner between Xi and Trump on Saturday, Treasury Secretary Steve Mnuchin said on Monday.

 

White House economic advisor Larry Kudlow said the figure was a broad benchmark that would depend on private transactions for U.S. goods and was subject to market conditions.

 

China committed to start lifting tariffs and non-tariff barriers immediately, including reducing its 40 percent tariffs on autos, Kudlow said.

 

"We expect those tariffs to fall to zero," he told reporters.

 

Americans would get a majority ownership in Chinese companies for the first time, Kudlow said on CNBC. Mnuchin, also speaking on CNBC, hailed a shift in tone.

 

Trump has made improving the terms of trade for the United States a signature of his "America First" presidency and has prided himself on confronting Beijing over trade practices that the United States and its allies complain are unfair.

 

"My meeting in Argentina with President Xi of China was an extraordinary one," Trump tweeted on Monday. "We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!"

 

Kudlow, director of the National Economic Council, said he, Mnuchin and U.S. Trade Representative Robert Lighthizer held private meetings in Argentina with China's Vice Premier Liu He, who told them Beijing would move quickly on its new commitments.

 

"The history here with China promises is not very good. And we know that," Kudlow said. "However, I will say this: President Xi has never been this involved."

 

Kudlow said: "They cannot slow walk this, stall this, meander this. Their word: 'immediately.'"

 

Administration officials expressed a mixture of skepticism and optimism on Monday over whether China would deliver. None of the commitments were agreed to in writing and many specifics have yet to be worked out. Kudlow said U.S. officials would monitor Chinese progress closely.

 

Negotiators will actually have less than 90 days to reach a deal because of holidays in both countries over the next three months, Chinese ambassador to the United States, Cui Tiankai, told reporters on Monday.

 

LIGHTHIZER TO LEAD TALKS

Trump has appointed Lighthizer, who just completed a new trade agreement with Canada and Mexico and is one of the administration's most vocal China critics, to oversee the new round of talks, officials said.

 

The appointment may signify a harder line with Beijing and marks a shift from the past, when Mnuchin had a lead role.

 

"He's the toughest negotiator we've ever had at the USTR and he's going to go chapter and verse and get tariffs down, non-tariff barriers down and end all these structural practices that prevent market access," White House trade adviser Peter Navarro told National Public Radio on Monday.

 

The White House is stepping up efforts to prod other countries to build more vehicles in the United States. Lighthizer and other officials, including Kudlow, are set to meet with German automakers, including the chief executives of Volkswagen AG <VOWG_p.DE> and Daimler AG, on Tuesday, people briefed on the matter said.

 

Kudlow said the meeting was not meant to focus on potential tariffs, though Trump still had that option in his "quiver," and the automakers would be encouraged to build engines in the United States.

 

On Sunday, Trump tweeted that China had agreed to cut import levies on American-made cars.

 

Chinese regulators did not respond to requests for comment on the tweet. Neither country mentioned auto tariffs in their official briefings of the meeting on Saturday.

 

(Reporting by David Lawder and Jeff Mason; Additional reporting by David Shepardson, Steve Holland, David Brunnstrom and Alexandra Ulmer in Washington; Meng Meng and Stella Qiu in Beijing, Andrew Galbraith and David Stanway in Shanghai, and Noah Sin and Anne Marie Roantree in Hong Kong; Writing by Jeff Mason and Doina Chiacu; Editing by Simon Webb and Sonya Hepinstall)

 

-- © Copyright Reuters 2018-12-04

 

[zaphod reborn]

Kudlow and Mnuchin are just applying liptstick on a pig.  Trump just kicked the can down the road.  Bottom line is China will still be demanding transfer of technology and stealing IP from American companies.  They have no interest in agriculture, oil production or low-level manufacturing so will gladly keep buying those from the US.  Ultimately, they want to corner the market in high-tech manufacturing, like airplanes and robotics.  Trump is being played once again, a total embarrassment to the Wharton School of Business.

[pegman]

Since Trump started his trade war with China the American trade balance has gotten worse. Now he meets with the Chinese leadership and begs them to start buying American farm products because rural Republicans are freaking out. This guy's about to really get schooled. 

Edited December 4, 2018 by pegman

[mikebike]

42 minutes ago, zaphod reborn said:

They [China] have no interest in agriculture...

Really? You actually believe China has no interest in feeding their people?

[scorecard]

1). China has massive internal food production capabilities.

 

2). China can buy quality products and at OK prices from many other countries other than the US.

[scorecard]

Seems to me:

 

- China will make some concessions but at least disadvantage to them, and why not?

 

- China will take all of this in their stride and will take action when they are ready, not as a reaction to any demanding from the US.  

 

 

[pegman]

2 hours ago, zaphod reborn said:

Kudlow and Mnuchin are just applying liptstick on a pig.  Trump just kicked the can down the road.  Bottom line is China will still be demanding transfer of technology and stealing IP from American companies.  They have no interest in agriculture, oil production or low-level manufacturing so will gladly keep buying those from the US.  Ultimately, they want to corner the market in high-tech manufacturing, like airplanes and robotics.  Trump is being played once again, a total embarrassment to the Wharton School of Business.

China is the biggest agriculture producer in the world. Number 6 in petroleum. 

[Emster23]

"The United States expects China to take immediate action to cut tariffs..." may I edit to be a bit more reflective of reality? 

The United States Trump expects China to take immediate action to cut tariffs... 

 

[wayned]

The bottom line is that nobody has a clue of what was agreed to.  Trump heard what he wanted to hear and made up the rest to impress his base.  Kudlow has already came out and said that the car import tariffs were being removed weren't what China actually agreed to.  it's just like the outcome of the summit that Trump had with Putin and Kim, His recollection of the agreements made nowhere match what was actually agreed to and i doubt that he even remembered any agreements that were made as he was too busy organizing his speaCh to make him, and only him look good!

[Pedrogaz]

Waste of breath. Anything Trump does is full of lack of communication and confusion. And he tells lies, whoppers. My advice is do not invest based on the weeks of this fellow......wait to see the action which you can guarantee will be much less than the announcement proclaims.

[zaphod reborn]

1 hour ago, pegman said:

China is the biggest agriculture producer in the world. Number 6 in petroleum. 

So, they don't import soybeans or oil?  China is a huge market, and they have no interest in expanding their domestic production.  They want to manufacture high-ticket items.  They understand profitability.  Another Trumpster with no understanding of macroeconomics.

[zaphod reborn]

2 hours ago, mikebike said:

Really? You actually believe China has no interest in feeding their people?

They have no interest in expanding their domestic agricultural production.  They are happy to import agricultural products.  They are focused on manufacture of high-ticket items.  Their middle-class doesn't want to work the fields.

[mikebike]

1 minute ago, zaphod reborn said:

They have no interest in expanding their domestic agricultural production.  They are happy to import agricultural products.  They are focused on manufacture of high-ticket items.  Their middle-class doesn't want to work the fields.

Why on earth would you believe this tripe?

 

But you did give me a larf... you may be one of only a few people in the world that believe China is “focused on the manufacture of high-ticket items...”

 

Middle-class ANYWHERE in the world don’t want to work in the fields.

 

Non of that supports your bizarre conclusion that China has no interest in expanding domestic agriculture production. If you can point me towards anything that supports your opinion I would be happy to read it. Otherwise the chart below seems to indicate a factual issue with your theory.

[farcanell]

4 hours ago, webfact said:

The United States expects China to take immediate action

Meanwhile... China expects that the Democrats will take over congress and install mechanisms to reign in the orange cluster bomb, within 90 days, thereby forestalling a detonation.

[mike324]

China doesn't import much cars from the US, the popular ones such as GM and Ford are already made in china.

 

Trump needs to make this deal "work" because US soy farmers are suffering big time. China has already switched to purchasing from Brazil for the coming months. Not only that China, has already instructed farmer to plant soy crops so they would need to rely less on imports as well.

 

4 hours ago, webfact said:

Americans would get a majority ownership in Chinese companies for the first time, Kudlow said on CNBC. Mnuchin, also speaking on CNBC, hailed a shift in tone.

This is a false statement, you can already own majority depending on you business structure. Yes for select industries such as car manufacturing, you were not able to have majority ownership before. So again, this will benefit mostly the US car automakers and nobody else. Its a small win, but not a big win like they are playing it.

 

The tariff war is just hurting the US more so than china. 

[Redline]

4 hours ago, mikebike said:

Really? You actually believe China has no interest in feeding their people?

They have been buying up farm land and meat companies for a long time.  They are shifting away from USA reliance, and getting other countries to grow what they need/want

[Redline]

He knows he can move the markets, and surely he has people investing for him on every tweet negative or positive.  He hits individual companies, the dollar, industries, commodities...

He is inherently corrupt 

Edited December 4, 2018 by Redline

[mikebike]

44 minutes ago, Redline said:

They have been buying up farm land and meat companies for a long time.  They are shifting away from USA reliance, and getting other countries to grow what they need/want

Yes like all countries China buys other counties produce. The salient point I was replying to was a bizarre assertation that China does not want to grow at home which is patently false. They actually are sponsoring co-research in Singapore with very successful vertical farms. China will do just fine feeding the billion(s).

[Tug]

The Chinese have been negotiating fir 1,000+years do you honestly think Donald is going to get his way really???

[wayned]

No one knows what was agreed to!  If you out Xi in one room and Trump in another and asked them to write down the details of what they agreed to you would have to totally different explanations.  Who would you believe?  I'd have to put my $ on Xi as Trump only will express something that makes HIM look good!  All of the other candy asses that were at the dinner are afraid to contradict him!

[Chomper Higgot]

Get your denial glasses on:

 

https://www.vanityfair.com/news/2018/12/trump-admits-his-incredible-deal-with-china-is-bullshit

[bristolboy]

And in what should be a huge surprise to no one:

U.S. stocks battered as U.S.-China trade deal appears to sputter

The economic agreement President Trump said he reached with Chinese leader Xi Jinping on Saturday showed signs of unraveling Tuesday, with the White House threatening new penalties against Beijing and multiple officials seeking to downplay expectations for an eventual deal.

Investors, who had applauded the deal on Monday, turned sharply negative Tuesday. The Dow Jones industrial average dropped 799 points, or 3.1 percent, to close at 25,027. The Standard and Poor’s 500-stock index fell 3.2 percent, and the tech-heavy Nasdaq gave up 3.8 percent.

https://www.washingtonpost.com/business/economy/i-am-a-tariff-man-trump-says-as-china-talks-show-signs-of-sputtering/2018/12/04/516425e4-f7e0-11e8-8c9a-860ce2a8148f_story.html?utm_term=.9d725cb295c9

[Tug]

Well looks like we know what Wall Street thinks of Donald and his negotiating 

[ballpoint]

5 hours ago, wayned said:

No one knows what was agreed to!  If you out Xi in one room and Trump in another and asked them to write down the details of what they agreed to you would have to totally different explanations.  Who would you believe?  I'd have to put my $ on Xi as Trump only will express something that makes HIM look good!  All of the other candy asses that were at the dinner are afraid to contradict him!

The problem with that is trusting the translator.  Most in the West can't read Chinese, and I doubt if Xi can write in English, so one would be unintelligible gibberish and the other would be written in Chinese.

[wayned]

8 minutes ago, ballpoint said:

The problem with that is trusting the translator.  Most in the West can't read Chinese, and I doubt if Xi can write in English, so one would be unintelligible gibberish and the other would be written in Chinese.

you really are pushing it!  Seems like the stock market doesn't need a translation as it knows Trump's reputation!! He is unable, a personal characteristic, to say anything that he thinks will not make him look goad, he just can't do it.

[mtls2005]

13 hours ago, Redline said:

They have been buying up farm land and meat companies for a long time.

 

WH Group Ltd., then known as Shuanghui Group or Shineway Group, the largest meat producer in China beat out Thai conglomerate CP Group in 2013 with the Smithfield purchase, for $ 4.72 billion, then, the largest purchase of a U.S. company by a Chinese one.

 

 

It's still unclear to me, and the average citizen, what the president's overall trade plan(s) are.

 

With regards to China, I think he needs to go to the American public - not via twitter - and clearly, concisely and simply state his goal(s), plans and enlist their/our support.

 

Ranting on twitter, or throwing out one-liners at a rally does not seem presidential?

 

 

[Cryingdick]

19 hours ago, zaphod reborn said:

Kudlow and Mnuchin are just applying liptstick on a pig.  Trump just kicked the can down the road.  Bottom line is China will still be demanding transfer of technology and stealing IP from American companies.  They have no interest in agriculture, oil production or low-level manufacturing so will gladly keep buying those from the US.  Ultimately, they want to corner the market in high-tech manufacturing, like airplanes and robotics.  Trump is being played once again, a total embarrassment to the Wharton School of Business.

 

China has no interest in low level manufacturing? You mean like a factory that makes iPhones? 

[Srikcir]

6 minutes ago, wayned said:

Seems like the stock market doesn't need a translation

Here's the market translation:

Add that Trump continues to be delusional (that's PC - ignorant might be more descriptive):

https://www.cnbc.com/2018/12/04/trump-calls-himself-tariff-man-as-china-talks-restart-after-trade-war-truce.html

It is Americans that pay for tariffs on Chinese imports. Trump is taking $billions from American consumers - in effect a massive tax on Americans without any legislative consent.

 

[mtls2005]

"Kudlow and Mnuchin are just applying liptstick on a pig."

 

Would be nice if they put the lipstick on the pig's lips, and not the butt.

 

And if they were using the same color lipstick, and the same pig.

 

What a mess.

 

 

Edited December 5, 2018 by mtls2005

[Cryingdick]

6 hours ago, Tug said:

The Chinese have been negotiating fir 1,000+years do you honestly think Donald is going to get his way really???

 

He needs to hold his ground right now. China has more to lose the USA buys their crappy products. We also owe China a lot of money. When you owe the bank $500,000 they own you. When you owe the bank 500 billion dollars you own them.

 

The tariffs are small and a drop in the bucket as they stand even if they go up to 25% on 250 billion. It's nothing. Trump should be more bold and raise tariffs to 25% of the whole enchilada. America will suffer but not as much as some other countries. 

 

I am willing to take a hit on my stocks if this happens. If Trump caves now we will be pleased forever. It's time to make a stand. One that is strong enough that their dear president for life can appreciate it.

 

America is self-sufficient if it wants (or has) to be. Xi is trying to out last Trump and Trump must not let this happen if he stands any chance at a second term.